Thursday, January 03, 2019

Jet Airways defaults on loan repayment, ICRA downgrades to D category

Mumbai: Fund-starved Jet Airways has defaulted on payment of interest and principal installment to a consortium of banks led by State Bank of India (SBI) as the airline’s initiatives to raise a Rs 1,500 crore short-term loan in order to meet its working capital requirement and payment obligations failed to materialise on time. Rating agency ICRA on Wednesday downgraded the airline’s Rs 10,963 crore loan and debenture ratings to the ‘D’ category Instruments with ‘D’ rating are in default or are expected to be in default soon. Jet Airways shares plunged 6.16 per cent to Rs 263.75 on the BSE following the delay in loan repayment.
“This is to inform you that the payment of interest and principal installment due to the consortium of Indian banks (led by State Bank of India) on December 31, 2018 has been delayed due to temporary cashflow mismatch and the company has engaged with them in relation to the same,” it said in a stock exchange filing. The company’s liquidity position is stressed, with operating losses, high debt levels and a negative networth

According to ICRA, the ratings downgrade considers the delays by the company in the payment of the interest and principal installment due on December 31, 2018 due to cash flow mismatches. “There have been delays in the implementation of the proposed liquidity initiatives by the management, which have aggravated its liquidity. The company has already been delaying its employee salary payments and lease rental payments to the aircraft lessors,” it said.
03/01/19 Indian Express

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